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Loan Servicing

Forms

Deferments

A deferment is defined as "a temporary suspension of payments." Payments on Federal Perkins and University loan(s) may be deferred for a variety of reasons. Available deferments vary depending on the type of loan. If you feel that you may be eligible for a deferment, it is your responsibility to apply with our office.

Cancellations

Your loan(s) may be eligible for cancellation. If granted, the cancellation releases you from your obligation to repay all or a specified portion of your loan(s). Most cancellations forgive your loan(s) over a period of five years. Cancellation rates vary depending on the type of cancellation.

PSU Autopay

PSU Autopay provides a fast and convenient way to repay your student loans and delinquent tuition. With Penn State pride, we offer you the ability to have your payments automatically deducted from your checking/savings account. The PSU Autopay Authorization Agreement is available below.

Setup Automatic Payments Online

If you'd rather skip the paper process, you can Setup Automatic Payments on-line.

Setup Automatic Payments

Consent to Release Information

This form provides your written consent to release to third parties financial records that pertain to your student loan(s) and/or tuition account. Third parties can include but are not limited to parents, employers and creditors.

Master Promissory Note

A Master Promissory Note (MPN) must be signed prior to the disbursement of Federal Perkins or University loans to the student account.

Terms

The MPN will cover loans awarded under a specified loan type for up to ten years. Please note, there are separate MPN(s) for Federal Perkins and University loans.

Wait for an Invitation

If you have been awarded a Federal Perkins and/or a University loan, an invitation to electronically sign your MPN will be e-mailed to you in July. You must have an active Penn State Access Account and have classes scheduled.

How do I sign?

Once you receive the e-mail invitation, complete the following steps*:

  1. Go to Penn State's Electronic Signature Web site (address provided on your invitation)
  2. Login using your user ID and password
  3. Follow the instructions

*If you are a World Campus student, please contact us.

Please contact us if you have any questions concerning your MPN or our electronic signature Web site.

Federal Direct Stafford Loans
Federal Direct Stafford loans are not serviced by Student Financial Services. Please refer to the Office of Student Aid for signature procedures regarding your Federal Direct Stafford loans.

Loan Disclosures

The University loan disclosure process must be completed prior to the disbursement of any University loan funds to your student account. Loan funds will be disbursed three business days following the completion of the disclosure requirements.

Terms

It is a federal requirement to complete disclosures for each semester you are awarded a University loan.

Wait for an Invitation

If you have been awarded a University loan, an invitation to electronically sign your loan disclosures will be e-mailed to you in July. You must have an active Penn State Access Account and be scheduled for classes. If the award is made during the semester, an invitation will be e-mailed to you the following day.

How do I sign?

Once you receive the invitation, complete the following steps*:

  1. Visit MyAccounts
  2. Login using your user ID and password
  3. Click on "Disclosures" and follow the instructions

*If you are a World Campus student, please contact us.

Loan Exit Counseling

To comply with U.S. Department of Education and Penn State regulations, students with Federal Perkins and/or University loan(s) are required to complete Loan Exit Counseling. Loan Exit Counseling is a tool used to educate student borrowers about Federal Perkins and University loan(s).

Current Students

If you are a current student and have received an email invitation to complete Loan Exit Counseling for your Federal Perkins and/or University loan(s), please follow the instructions in the message.

Former Students

If you are no longer enrolled at Penn State, Loan Exit Counseling requirements can be met by completing and submitting the following Loan Exit Counseling Packet (instructions included):

In order to meet Loan Exit Counseling requirements, your signed repayment schedule(s) must accompany the Loan Exit Counseling Packet. To receive your repayment schedule(s), please contact us.

Loan Repayment

Your loan(s) are serious obligations that must be repaid in a timely manner. Inability to pay is no excuse for defaulting. With the availability of various loan provisions, assistance can be provided until you regain the ability to repay your obligation.

The first step is to become knowledgeable about your loan(s) and the available provisions. Prior to leaving Penn State, you are required to complete Loan Exit Counseling. Loan Exit Counseling helps you by providing information about loan repayment and available provisions. It is important to complete and review your exit information prior to entering repayment of your loan(s).

In addition to deferments/cancellations, your loan(s) may be eligible for consolidation. All of your federal loans may be combined into one convenient payment that is often lower than the sum of your individual payments. Since consolidation is not the best alternative for everyone, it is recommended to review the pros and cons of consolidation before making a decision. University loans are not eligible for federal consolidation.

It is your responsibility to ensure your loans are current and up to date. The consequences of defaulting may be irreversible. If you are unable to find a solution that meets your needs or need assistance in understanding your options, please contact us for assistance.

For your convenience, payments can be automatically deducted from your bank account via our automated payment system, PSU Autopay.

Debt Management

Plan Your Finances

A college education is an investment in your future. Most Penn State students and their families rely on educational loans to finance their degree.

Get a return on your investment

If you begin with the end in mind, you will understand the impact of your borrowing and spending habits.

  • Remember the big picture-your education will take time to complete. Consider the length of time it will take to earn your degree.
  • You do not have to borrow the maximum amount the lender will approve.
  • Be aware of your ability to repay your loan debt after earning your degree.
  • Consider the earning potential in your field of study.
  • Create a realistic budget. Live within your means.

Beware of credit cards

As a college student, you may be inundated with offers from credit card companies promoting free gifts to apply. Although a credit card may be useful in emergencies and can help you establish credit, the lure of "easy money" offered by credit cards and a "Buy now-Pay later" attitude has contributed to financial problems for many college students.

Additional Resources

Consequences of Defaulting

Definition of Default

  1. Failure to make a scheduled payment when due under the repayment schedule established by the institution or;
  2. Failure to submit to the institution, on or before the payment due date, documentation that qualifies the loan for a deferment, forbearance or cancellation provision listed on the master promissory note (MPN).

The following actions may occur on a loan in default:

  • Assessment of a $5.00 per month fee.
  • Placement of a hold on your academic records that will cause transcripts to be withheld and future registration denied.
  • Delinquency reported to a national credit bureau. Credit ratings remain on the Credit Bureau records for approximately seven years following the date of first delinquency. Delinquencies may affect your ability to obtain future loans and employment.
  • Ineligibility for future Title IV financial aid until the loan is out of default.
  • Placement of the loan with a licensed collection agency. Collection fees charged by the agency can be up to 30% of your loan balance if placed for the first time and 40% for subsequent collection efforts and/or litigation.
  • Assessment of litigation and court costs. Per Federal Regulations, these costs are charged to the student/borrower.
  • Assignment to the Department of Education. Our office is not authorized to service any account assigned to the Department of Education. The deferment and cancellation provisions on the MPN become invalid. The Department of Education is also authorized to garnish various funds (wages, income tax refunds, etc.) to recover the outstanding balance of assigned loans.

Loan Consolidation

Should I Consolidate My Federal Loans?

A loan consolidation combines federally funded loans into a single new loan, reducing your number of payments each month. Consolidation typically results in longer repayment plans with lower monthly payments.

Please note, University loans and Private loans are not eligible for federal loan consolidation.

Advantages

  • Smaller payments
  • Special rate discounts may be available
  • Fewer bills

Disadvantages

  • Forfeiture of the majority of deferment and cancellation provisions
  • Longer repayment period (up to a 30 year repayment schedule)
Additional Information
Federal Direct Consolidation Loans Information Center
1-800-557-7392
What loans can I consolidate?

FSA Ombudsman Group

If we are unable to answer your questions or resolve your issues concerning your Federal Perkins Student Loan, the Department of Education's Ombudsman is available to respond to your concerns.

U.S. Department of Education
FSA Ombudsman
830 First Street, NE
Fourth Floor
Washington, DC 20202-5144

Toll free telephone number: 877-557-2575
Fax number: 202-275-0549

Federal Student Aid Ombudsman Group Web site